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How to Conduct a Workplace Investigation on Employee Theft

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Employee theft can increase company costs significantly. One of the best ways to prevent theft is to create an environment where employees know theft allegations will be taken seriously and investigated. You must establish procedures and guidelines for your company to undertake an employee theft investigation, so that you can be sure you act in a way that is both legal and effective.

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Assign an investigator. You must determine if you will assign a person to look into employee theft charges based on department, location or type of allegation. That is, you may have department managers look into theft in their respective departments, ask managers in specific geographic areas to monitor employee theft, or treat cases according to seriousness by assigning security to investigate major theft and leaving petty theft allegations for supervisors.

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Begin the investigation as quickly as possible. You must create an environment where employees know that losses are investigated quickly. The moment you are aware of the loss, the clock begins ticking on the statute of limitations. Each state has different laws on this, so check your state's rules and guidelines. Employees will see that you take swift action and that reputation alone may help prevent future theft.

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Decide what to do with an employee who is under investigation. You may leave the employee in place so that you can monitor the situation for continued theft. However, if the employee knows you are investigating, it may be best to suspend the employee until you can make a final determination in the case. Because the guilt or innocence has not been decided, you will have to pay the employee until you know if you are filing charges.

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Establish confidentiality guidelines for investigators. Make it clear that employee records, reports from other employees, and evidence gathered can only be shared with the investigative team and any law enforcement officials that are called in. Do not allow rumors to spread through your organization based on investigator leaks of information.

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Establish confidentiality guidelines for employees. Tell all employees you have to interview in the case that their responses will not be shared with any employee outside of the investigative team. Fear of retaliation can cause some employee witnesses to withhold information. Assure your employees that retaliation will not be allowed in your company.

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Choose discipline or termination of the employee. Once you have your findings, you have to decide what to do with the employee. Very serious cases involving either a large dollar value or repeated theft activity may cause you to fire the employee. Make sure your evidence is clear and convincing, so that you can defend your action if you have to. In cases of petty theft, you may elect to discipline the employee. This can be effective in not only stopping that employee's theft but discouraging theft among others in your company. Discipline can include asking for restitution, a temporary suspension without pay, a demotion and a letter placed in the employee's file.

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Recover your loss. If you cannot get restitution from the employee, you may file a civil suit or pursue criminal charges. Also contact your insurance agent to see if your coverage applies to the particular case you have investigated.